CULTIVATION OF MEDICINAL AND AROMATIC CROPS AS A MEANS OF DIVERSIFICATION OF AGRICULTURE IN UTTARANCHAL R.P.S.MALIK

Transcription

1 1 Research Study No. 2007/5 CULTIVATION OF MEDICINAL AND AROMATIC CROPS AS A MEANS OF DIVERSIFICATION OF AGRICULTURE IN UTTARANCHAL R.P.S.MALIK AGRICULTURAL ECONOMICS RESEARCH CENTRE UNIVERSITY OF DELHI DELHI AUGUST, 2007

2 2 PREFACE As a result of continuing increase in the demand for herbal medicines around the world and with little control over their collection or trade regulation, the only way to protect wild populations of medicinal plants and minimize threats to sustainability is to increase the supply of equally effective cultivated specimens. Shift from collection to cultivation of medicinal and aromatic plants is also likely to ensure purity, authenticity and sustainable supply of raw materials required for herbal drugs. Despite some efforts made at promoting cultivation of these plants, their adoption for cultivation by farmers have, for a variety of reasons, so far not been very encouraging. Encouraging farmers to cultivate medicinal and aromatic plants through a diversification of their cropping pattern in favor of these crops, requires information on a number of underlying economic and non-economic variables. Given that efforts at promoting cultivation of medicinal and aromatic plants are still in their early stages in different parts of the country and some of the basic reliable information on some of the underlying economic variables associated with their cultivation is not easily available, the Ministry of Agriculture assigned Six Agro Economic Research Centres (AERCs), located in different parts of the country to undertake a study on Cultivation of Medicinal and Aromatic Crops as a Means of Diversification in Agriculture. The AERC Unit located at ADRT, Institute of Social and Economic Change, Bangalore has coordinated the study who have also provided the basic analytical framework. The present report relates to the state of Uttaranchal. We would like to thank Professor R.S.Deshpande (ISEC) for coordinating the study and Mr Nipender Chouhan (CAP, Selaqui) for help in conduct of the field work. We are grateful to Mr Mool Chand, Mr P.K.Bhattacharya, Mr K.K.Shingari and Mr Balbir Singh for shouldering the responsibility of conducting the field work. Mrs Santosh Mann, Mrs Parveen Taneja and Mrs Prem Bhasin helped with the computer work for which we are thankful to them. We hope the results of the study would be useful in supporting the efforts aimed at promoting cultivation of medicinal and aromatic plants. New Delhi August 2, 2007 R.P.S.Malik

3 3 CONTENTS SECTION 1 INTRODUCTION What are Aromatic and Medicinal Plants? 1.2 The Study: Scope and Objectives 1.3 Medicinal and Aromatic Plants in the Himalayan Region 1.4 The Study : Methodology 1.5 Cultivation Practices and Uses of Jumbo Faran 1.6 Cultivation Practices and Uses of Lemon Grass 1.7 Outline of the Report SECTION II IMPORTANCE OF MEDICINAL AND AROMATIC 12 PLANTS IN UTTRANCHAL 2.1 The State and its Economy 2.2 Medicinal and Aromatic Plants in Uttaranchal 2.3 System of Collection and Marketing of Herbs in Uttaranchal 2.4 Cultivation of Medicinal and Aromatic Plants 2.5 Infrastructure for R & D in Medicinal and Aromatic Plants in Uttaranchal 2.6 Infrastructure for Processing Facilities in the State 2.7 Action Plan for Development of Medicinal and Aromatic Plants SECTION III ECONOMICS OF CULTIVATION OF AROMATIC AND MEDICINAL PLANTS Relative Crop Economics of Medicinal Plants (Jumbo Faran) with Competing Crop(s) 3.2 Operation wise Labor Requirement for Cultivation of Medicinal Plants 3.3 Operation wise Labor Use for Cultivation of Rajma and Wheat ( Competing crops to Medicinal Plants)

4 4 3.4 Cost of Cultivation of Medicinal Plants 3.5 Relative Crop Economics of Aromatic Plants (Lemon Grass) with Competing Crop(s) 3.6 Operation wise Labor Requirement for Cultivation of Aromatic Plants 3.7 Operation wise Labor Use for Cultivation of Paddy and Wheat ( Competing crops to Aromatic Plants) 3.8 Cost of Cultivation of Aromatic Plants SECTION IV MOTIVATIONAL FACTORS AND PROCESS OF DECISION MAKING Experiences with Cultivation of Medicinal Plants 4.2 Experiences with Cultivation of Aromatic Plants 4.3 Motivational Factors : What prompted Cultivation of Medicinal Plants? 4.4 Motivational Factors : What prompted Cultivation of Aromatic Plants? 4.5 Increasing Area Under Cultivation of Medicinal Plants 4.6 Increasing Area Under Cultivation of Aromatic Plants 4.7 Factors That Could Divert Area Away from Medicinal Plants 4.8 Factors That Could Divert Area Away from Aromatic Plants SECTION V MARKETING OF MEDICINAL AND AROMATIC PLANTS Marketing Channel for Disposal of Produce : Medicinal Plants 5.2 Marketing Channel for Disposal of Produce : Aromatic Plants 5. 3 Problems Encountered in Marketing Medicinal Plants 5.4 Problems Encountered in Marketing Aromatic Plants 5.5 Estimation of Domestic and International Demand for Medicinal and Aromatic Plants SECTION VI SUMMARY OF MAIN FINDINGS AND CONCLUSIONS Comparative Economics of Identified Medicinal and Aromatic Plants with Alternative Crops 6.2 Experiences of Sampled Cultivators of Medicinal and Aromatic Plants Changes in Area under the Identified Crops

5 5 6.3 Motivating Factors 6.4 Factors that Could Help Bring Larger Area Under the Identified Crops 6.5 Factors that Could Influence Diversion of Area From Under Identified Crops 6.6 Marketing of Medicinal and Aromatic Plants 6.7 Issues Related to Cultivation and Extension 6.8 Need for Strengthening Database & Market Intelligence 6.9 Inadequate Processing Facilities Marketing

6 6 LIST OF TABLES Table Number Page 1.1 Sample Crops and Sample Size Land use pattern in UTTARANCHAL Cereals: Area, Production & Productivity Pulses: Area, Production & Productivity Oilseeds: Area, Production & Productivity Area and Production of Important Aromatic Plants in Uttaranchal District wise Number of Ayurvedic Pharmacies in Uttaranchal 2.7 Number of Distillation Units for Distillation of Aromatic Plants Uttaranchal Crops/ Crop Combinations Selected for Comparing the Relative Crop Economics Some Characteristics of the Sampled Farmers of Medicinal Plants Details of Land Holding of Sampled Growers of Medicinal Plants Details of Operation wise Labor Use in Cultivation of Medicinal Plants (Average Per Ha Per Year) Operation wise Labor Use in Rajma, Wheat and Rajma+Wheat Economics of Cultivation of Medicinal Plants (Per Hectare Per Year Averaged Over Five Years) Economics of Cultivation of Rajma (Competing Crop for Medicinal Plants) Economics of Cultivation of Wheat (Competing Crop for Medicinal Plants) 35

7 7 3.9 General Features of the Sampled Cultivators of Aromatic Plants Details of Land Holding of Sampled Growers of Aromatic Plants Details of Operation wise Labor Use in Cultivation of Aromatic Plants (Average Per Ha Per Year) Operation wise Per Hectare Labor Use in Paddy, Wheat and Paddy+Wheat Economics of Cultivation of Aromatic Plants (Per Hectare Per Year Averaged Over Five Years) Economics of Cultivation of Paddy (Competing Crop for Aromatic Plants) Economics of Cultivation of Wheat (Competing Crop for Aromatic Plants) Comparative Economics of Jumbo Faran and Lemon Grass With Their Competing Crops Summary Results (Rs Per Hectare) Experiences with cultivation of Medicinal plants and Changes in Area Under Cultivation Experiences with cultivation of Aromatic plants and Changes in Area Under Cultivation Motivating Factors for Cultivation of Medicinal Plants Motivating Factors for Cultivation of Aromatic Plants Factors that would encourage larger area under Medicinal plants Factors Constraining Increasing Area under Medicinal plants Factors that would encourage larger area under the Aromatic plants Factors Constraining Increasing Area under Aromatic plants Circumstances under which farmers would move area out of Medicinal plants Circumstances under which farmers would move area out of Aromatic plants 62

8 8 5.1 Reasons for Choice of a Particular Marketing Channel Medicinal Plant Reasons for Choice of a Particular Marketing Channel Aromatic Plants Problems Encountered in Marketing of Medicinal Plants Problems Encountered in Marketing of Aromatic Plants Comparative Economics of Jumbo Faran and Lemon 70 Grass With Their Competing Crops Summary Results (Rs Per Hectare)

9 9 EXECUTIVE SUMMARY CULTIVATION OF MEDICINAL AND AROMATIC CROPS AS A MEANS OF DIVERSIFICATION OF AGRICULTURE IN UTTARANCHAL 1 1. The Study: Rationale, Scope and Objectives Most of the medicinal plants grow wild and are collected from forests. Hundreds, and possibly thousands, of plant species are being harvested by millions of poor rural population and used by millions around the world for treating a variety of illnesses. As a result, documenting their population levels or ascertaining the impact of their uncontrolled extraction for use and trade on sustainability has proven to be difficult. However, in the absence of any significant efforts having been made so far at their conservation, serious concerns have often been raised about the increasing threat of depletion and the potential endanger to the survival of plant species in the wild as a result of their uncontrolled extraction. Due to continuing increase in the demand for herbal medicines around the world and with little control over their collection or trade regulation, the only way to protect wild populations of medicinal plants and minimize threats to sustainability is to increase the supply of equally effective cultivated specimens. Shift from collection to cultivation of medicinal and aromatic plants will also ensure purity, authenticity and sustainable supply of raw materials required for herbal drugs, including polyherbals. Despite some efforts made at promoting cultivation of these plants, their adoption for cultivation by farmers have, for a variety of reasons, so far been slow to come by. Encouraging farmers to cultivate medicinal and aromatic plants through a diversification of their cropping pattern in favor of these crops, requires information on a number of underlying economic and non-economic variables. Some of the information needs include : the relative economics of cultivation of these crops vis-àvis alternative crops the farmers are currently cultivating, the demand for these crops, the availability of markets for disposal of these crops etc. Given that efforts at promoting cultivation of medicinal and aromatic plants are still in their early stages in different parts of the country and some of the basic reliable information on some of 1 This study has been undertaken by R.P.S.Malik.

10 10 the underlying economic variables associated with their cultivation is not easily available, the Ministry of Agriculture assigned Six 2 Agro Economic Research Centres (AERCs), located in those parts of the country where cultivation of medicinal and aromatic plants has already commenced or is in its early phases of introduction, to undertake a study on Cultivation of Medicinal and Aromatic Crops as a Means of Diversification in Agriculture. The AERC Unit located at ADRT, Institute of Social and Economic Change, Bangalore has coordinated the study who have also provided the basic analytical framework 3. Based on individual study reports, the ADRT will bring out a consolidated all-india status report. The present study conducted by AERC, Delhi pertains to the State of Uttaranchal. The specific objectives of the study are: 1. To understand the economics of cultivation of the selected medicinal and aromatic crops and find their economic and market potential as preferred by the farmers. 2. To assess the area being cultivated under selected medicinal and aromatic plants 3. To study the relative economic impact of cultivation of medicinal and aromatic plants by the farmers 4. To identify bottlenecks in the marketing of medicinal and aromatic plants and suggest possible remedies. 5. Attempt an estimation of domestic and international demand for the selected medicinal and aromatic crops in the light of the effect of new IPR regime on pharmaceuticals 2. Methodology The present study is based mainly on primary data collected from the farmers who have been cultivating some of the medicinal and aromatic crops. The study design stipulated selection of one medicinal crop and one aromatic crop for detailed enquiry. However adoption of any strictly scientific criterion for selection of a specific medicinal and aromatic plant, from amongst those being cultivated by farmers, for 2 The Six states where this study has been conducted include Karnatka, Kerala, Madhya Pradesh, Maharashtra, Uttaranchal, and West Bengal 3 We would like to thank Professor R.S.Deshpande of ISEC for doing the basic groundwork and for coordinating the study.

11 11 detailed study was constrained due to the lack of a systematic secondary data base which should normally form the basis for such a selection. This lack of a data base in turn was due to the fact that cultivation of medicinal and aromatic crops is a relatively new phenomenon in Uttaranchal and the State wide data base on the area and production of these crops is yet to be compiled. In view of these and other related considerations the choice of crops for detailed enquiry was made as follows. Neither all plants collected from the wild are amenable to cultivation nor cultivation practices for all such crops found in the wild need to be developed. The groups of medicinal and aromatic crops, which are amenable for cultivation, comprise a large number of crops of which the cultivation practices and suitable plant material have so far been developed for only a few. Of these few however only a still smaller number of crops are actually being cultivated by the farmers. For example, while suitable cultivation practices have been developed for about 30 medicinal and aromatic crops, however cultivation on any significant scale ( either in terms of area under these crops, the level of their production or in terms of number of cultivators cultivating these crops) is being done in respect of one or two crops only due mainly to relatively better market demand for these crops as compared to the others and availability of sufficient quantities of required planting material which often is not easily available for all the crops developed in experimental stations for cultivation. Moreover given the fact that the cultivation of these crops is a relatively new phenomenon the limited resources available with official agencies for propagation of cultivation of new crops have rightly not been spread thinly over introduction of a larger number of crops in one go but efforts have been more focused. Given these considerations, the selection of crops and region for sample selection for the present study has been done based on whatever fragmented secondary information was available from formal and informal sources and on the basis of discussion with local official agencies in the State 4. For similar reasons, coupled with the fact that most of the farmers cultivating these identified crops were thinly stretched over a relatively large geographical area with hilly terrain, adherence to strict sampling procedures using generally followed stratification procedures for 4 We would in particular like to thank Mr Nipender Chouhan of CAP, Selaqui for his assistance in making secondary data available and in planning of the field work of the study.

12 12 regional and farm size grouping stratification for sample selection could not be followed in the present case. However all efforts have still been made to ensure that the sample households selection was random and that this sample fairly represent the prevailing situation on ground. Keeping in view the above constraints and limitations the medicinal crop selected for the present study is Jumbo Faran while the aromatic crop selected for the study is Lemon Grass. The sample for the medicinal crop has been selected from District Chamouli while for aromatic plants the sample has been drawn from District Dehradun. While the sample for the identified medicinal crop comprised of 21 cultivating households that of identified aromatic plant comprised of 42 households (Table 1). Table 1 Sample Crops and Sample Size Type of Crop Crop Name District Sample Size Medicinal Jumbo Faran Chamouli 21 (Allium stracheyi Baker) Aromatic Lemon Grass Dehradun 42 (Cymbopogon flexuosus Nees) Total 63 The identification of competing crops for comparing the economics of the identified medicinal plants and aromatic plant has been done on on the basis of the number of sampled farmers cultivating those crops as also the area under such crops. Accordingly for each of the two focused crops viz jumbo faran and lemon grass we have identified the following crop/crop combinations as competing crops for comparing the relative economics (Table 2). Table 2: Crops/ Crop Combinations Selected for Comparing the Relative Crop Economics Crop Type Crop Name Competing Crops Kharif Rabi Medicinal Jumbo Faran Rajma Wheat Aromatic Lemon Grass Paddy Wheat

13 13 3. Medicinal and Aromatic Plants in Uttaranchal Uttaranchal is situated in the western Himalayan zone, traditionally known as a gold mine of medicinal and aromatic plants in the country. The state has a very rich diversity of medicinal and aromatic plants. The State is mostly hilly and has broadly been divided in to two regions, Kumaon and Garhwal, which can be divided into three main climatic zones: The Alpine zone. The Temperate zone and, The Sub-Tropical zone. All three zones with altitudinal variations accommodate a variety of medicinal plants. The State is blessed with thousand of species; however, about 320 species have been identified having medicinal value. The forest department has reported about 175 species being commercially extracted and traded. It is estimated that the State is well positioned to generate revenue of more than Rs. 1, 000 crores per annum through medicinal plants trade. Traditionally, the tribal and poor population of Uttaranchal has had close socioeconomic developmental links with medicinal plants. These resources have provided them not only primary herbal medicines for their survival but also substantial part of their income. Even today, majority of the population living in and around the forests derive their income from collection of medicinal plants. The State Government in 2003 declared Uttaranchal as a "Herbal State 5. Although Uttaranchal is a storehouse of a rich variety of species of herbs, medicinal and aromatic plants however this massive potential has remained largely unexploited in the absence of a well planned and coordinated strategy for commercial cultivation and integrated arrangements for processing and marketing. Most of the herbs and medicinal plants are being collected as wild from forests essentially as a non timber forest product. Some of the available estimates on the extent of cultivation achieved so far however reveal that commercial cultivation is still in its infancy stage and less than 300 hectares. have so far been brought under cultivation under different schemes throughout the state. Even some of this cannot be said to be commercial in the real 5 This is also in line with the State s philosophy of going organic.

14 14 sense because these are in the form of herbarium, demo centres or nurseries. Only a few species have started to be commercially cultivated. The supplies from the cultivation sources do not exceed 5 to 7 % of the total volume traded and about 95% of the supplies continue to be sourced from wild sources and sites. The National Medicinal Plant Board has identified about 32 species for cultivation out of which Government of Uttaranchal has laid emphasis on about 10 which have been chosen for cultivation in Uttaranchal While we could not obtain the data on actual extent of cultivation of medicinal plants in the State, the data in respect of cultivated area and production of aromatic plants was available with Centre for Aromatic Plants (CAP), Selaqui. As per these estimates, 10 species of aromatic plants are being cultivated commercially in the State and these species currently occupy about 170 acres (about 67 hectares) land. Of these, a single species lemongrass alone accounts for more than 44 percent of the area while some others such as Stevia, Tagetus and Rose are being cultivated on less than 5 acres of land. 4. Main Results 4.1 Comparative Economics of Identified Medicinal and Aromatic Plants with Alternative Crops Cultivation of medicinal and aromatic plants is a relatively new phenomenon and the (selected) crops once planted can be harvested over almost five year period. Most of the selected cultivators have not had gone through the entire crop cycle period. Before we present the comparable results of relative crop economics it is important to mention that although the data on per hectare input use, crop output and crop profitability in the case of Jumbo Faran and Lemon Grass were derived on the basis of five year data the comparable information in the case of competing crops viz Rajma and Wheat (for Jumbo Faran) and Paddy and Wheat (for Lemon Grass) was derived on the basis of single year data. The relative economics is thus based on the assumption that the farmers would continue to grow the same crop/ crop combination (Rajma and Wheat in the case of Jumbo Faran, and Paddy and Wheat in the case of Lemon Grass) during the comparable period of five years during which these focused crops are cultivated, using current levels of input and thereby incurring current level of cultivation expenses and obtaining current levels of crop yields.

15 15 We present in Table 3 summary results of per hectare per year estimates of cost, gross value of output and net returns for Jumbo faran and its competing crops Rajma and Wheat, and Lemon Grass and its competing crops Paddy and Wheat. In the case of medicinal plants, while the cost of cultivation and gross returns for Jumbo Faran are substantially higher than the combined cost and value of output of rajma and wheat, the net returns of both are almost at the same level. In the case of aromatic plants while the cost of cultivation and gross value of output of lemon grass are less than the combined corresponding values for paddy and wheat, the net returns of lemon grass are higher than that of paddy and wheat by almost 34 percent. 4.2 Experiences of Sampled Cultivators of Medicinal and Aromatic Plants Changes in Area under the Identified Crops Overall 67 percent of the sampled cultivators of medicinal plants reported either increase or no change in cultivated area under the crop since they first started its cultivation. About 33 percent reported some decline in area allocated to this crop. Of the 42 sampled cultivators of aromatic plants, 29 percent reported some increase in area since they began its cultivation while the remaining 71 percent reported no change. An important observation is that none of the cultivators who started its cultivation reported any decline in its area since the start of the cultivation. Table 3: Comparative Economics of Jumbo Faran and Lemon Grass With Their Competing Crops Summary Results (Rs Per Hectare) Crop Row Cost (C2 Gross Value of Net Returns Basis) Output Medicinal Plants (Jumbo Faran) Rajma Wheat Rajma+Wheat Medicinal (Rajma+Wheat) Aromatic Plants (Lemon Grass) Paddy Wheat Paddy+Wheat Aromatic 5-8 (-) (-) (Paddy+Wheat)

16 16 Motivating Factors Of the various factors that have influenced the cultivation of medicinal plants, the most important ones have been: easy to cultivate, higher relative profitability, demonstration effect of its cultivation by fellow farmers, good demand of this crop and easy availability of inputs, low level of input requirement and low cost of production. Its easy cultivation practices and higher relative profitability have in fact been the two most important factors which have encouraged almost all the sampled cultivators to go in for cultivation of medicinal plants. Of the various factors that have influenced the cultivation of aromatic plants, the single most important factor that has influenced almost the entire sample households has been its ease in cultivation. The other important factors that have influenced the cultivation decision of the sampled farmers have however varied. Low input requirements and low input costs, higher relative profitability, easy availability of inputs, demonstration effect of the other farmers cultivating this crop and good demand for this crop have also to varying extent influenced the cultivation of aromatic plants by sampled farmers. Factors that Could Help Bring Larger Area Under the Identified Crops While 15 of the 21 sampled cultivators (71 percent) of medicinal plants responded that they are willing to bring larger area under cultivation of medicinal plants, the remaining 6 (29 percent) are not willing to bring any more area under the crop. The 15 sampled farmers willing to bring larger area under cultivation of medicinal plants, were asked to rank the factors, from those listed, they would consider relatively more important in influencing this decision. As expected all the 15 farmers listed increased profitability as the most important factor that would encourage them to bring still larger area under the crop. The second most important factor included improved marketing facilities for the crop (by 7 of the 15 farmers), more technical assistance and know-how including making available seedlings from the government agencies ( by 4 of the 15 sampled farmers) and improved

17 17 demand for these crops ( by 4 of the 15 cultivators). Thus apart from increased profitability, improvement in marketing facilities and improved demand for these factors could influence farmer s decision in bringing larger area under the crop. In the case of aromatic plants, of the 42 sampled cultivators 28 cultivators (67 percent) are willing to bring still larger area under the cultivation of aromatic plants while the remaining 14 ( 33 percent of the total) are not willing to increase any further the area under cultivation of this crop. Unlike in the case of sampled cultivators of medicinal plants, all of whom accorded increased profitability from the crop as the most important factor that would encourage them to bring larger area under the medicinal plants, in the case of aromatic plant cultivators the most important facilitating factor that could encourage such a shift varied. While 16 of the 28 cultivators who are willing to bring larger area under its cultivation attributed increased crop profitability as the most important motivating factor, 4 attributed increased and stable output prices as the most important factor. In the case of the remaining farmers the other most important factors that could influence their this decision is improved marketing facilities. Of the 14 sampled cultivators who are not willing to increase area under this crop, 11 (79 percent of the total) attributed it to small size of their land holding while the remaining 3 attributed it to lack of irrigation facilities. The second and third important factors in influencing such a decision have been lack of irrigation facilities, lack of processing facilities, difficulties in marketing etc. Factors that Could Influence Diversion of Area From Under Identified Crops Of the 21 sampled cultivators of medicinal plants, 20 are inclined to shift the current area under medicinal plants to an alternate crop should the relative profitability of other competing crop becomes higher than that of medicinal plants. Other important factors cited for such a likely shift in area from under the medicinal crop to other crops include non improvement in marketing facilities and lack of demand for these crops. As in the case of medicinal plants, a majority ( 57 percent ) of the sampled cultivators of aromatic plants would also shift the area from under aromatic

18 18 plants to alternate crops should the profitability of aromatic plants goes down in relation to that of the competing crops. Another 21 percent of the sampled cultivators however feel that the most important factor that would influence their decision in shifting away from aromatic plants to alternative crops is the non- improvement in marketing facilities for the aromatic plants. Another important factor that could influence the decision of the farmer in moving away from the cultivation of aromatic plants is the lack of increased demand for these crops. Marketing of Medicinal and Aromatic Plants The markets for disposal of cultivated medicinal plants have not so far very well developed and organized even though its cultivation, albeit on a small scale, started a few years ago. This is on account of several factors- the most important being the small size of production, that too scattered over four to five harvests in a year, and spread over a large hilly area with not so easily accessible tracts. As a result almost all the cultivators normally have no option but to sell their produce to a local middleman. In the present case also all the sampled cultivators of medicinal plants reported that they sold their entire marketable surplus to the local middleman. Further the entire crop by all the sampled cultivators was sold in the raw form rather than after processing it. Unlike medicinal plant, cultivation of the aromatic plants has been a relatively new phenomenon. Most of the efforts in this case so far have been directed towards encouraging farmers adopt its cultivation and extending the cultivation to newer areas. To promote its cultivation and allay any fears of the cultivators with regard to its marketing the cultivators were assured of guaranteed procurement of the entire crop at a fixed price by the CAP. Even those cultivators who would like to extract the oil from lemon grass, rather than selling the grass in its raw form to the CAP, were provided assured facilities for oil extraction at a nominal price. Apart from above, no significant formal market or processing facility in the vicinity of the production area has so far developed. Due to the absence of such a formal market, almost all the sampled cultivators sold their produce either to CAP or to the private

19 19 entrepreneur who has set up the above plant. Further as in the case of medicinal plant cultivators, the entire crop by all the sampled cultivators was sold in the raw form rather than after extracting the oil, even though facilities for this existed. Almost all the sampled cultivators of medicinal plants reported no problems with their crop disposal. This implies that even though the crop was being sold to a middleman, the farmers faced no problem in their dealings with him. Of the 42 sampled cultivators of aromatic plants, 19 (about 45 percent) reported no marketing related problems, while 11 (about 26 percent) reported large distance of their farm from the market center. Another 8 cultivators (about 19 percent) cited problems relating to delays in receipt of payment. 5. PROMOTING CULTIVATION OF MEDICINAL AND AROMATIC CROPS WHAT NEEDS TO BE DONE Despite the multifarious advantages associated with cultivation of medicinal and aromatic crops, their adoption for cultivation by farmers has not however so far been very encouraging. This is in large part due to the fact that medicinal and aromatic plants sector in India operates in a near policy vacuum. Encouraging cultivation of these crops require concurrent policies and effective actions aimed at regulating collection of medicinal plants from wild; research, development and extension efforts aimed at developing newer plant varieties suitable for cultivation and their propagation and adoption by farmers; organizing effective post harvesting marketing and trade operations including their processing and exports and developing an efficient marketing infrastructure, and building an efficient information base, including marketing intelligence, and its proper and timely dissemination. 5.1 Issues Related to Cultivation and Extension Given that thousands of species of medicinal and aromatic plants are available and collected from the wild, it is neither possible nor desirable to direct cultivation efforts at all these species. Promoting widespread cultivation of medicinal and aromatic plants through domestication of species grown in the wild, therefore require appropriate prioritization of research efforts. As a first step this would require identification of those species which are under more

20 20 serious threat of extinction and which are in relatively greater demand than the others both in the domestic market and for international trade. Knowledgeable person associated with the trade of these plants suggest that there are around medicinal plants which are required in bulk (1000 to tons) and are currently mainly obtained through natural sources (wild stocks) and which are depleting fast. Therefore, research priority in the first instance should focus efforts in developing suitable planting material and associated package of practices for cultivation of such species. In addition there are about 15 medicinal plants which are currently imported to meet the internal demand and therefore for the purpose of import substitution, developing suitable cultivation techniques for their cultivation is necessary. Systematic cultivation of medicinal and aromatic plants need specie-specific and location specific cultural practices, depending on prevailing soil, water and climatic conditions at a given location. Hence research and development work and cultivation techniques have to be tailored keeping these in view, though efforts need to be made towards standardization of cultivation practices and harvesting times to get the desired quality of medicinal and aromatic plants. While developing cultivated varieties, efforts need to be made towards genetic enhancement of at least some of these species, as compared to that of species found in the wild, by different methods of breeding including through traditional genetic transformation and use of biotechnology. The efforts of different agencies involved in the development of these plants need to be better coordinated and closely integrated. Non availability of suitable and adequate planting material at the right time severely constrains the adoption by farmers of these crops. More nurseries in different parts of the State need to be developed to make planting material easily available to farmers. Widespread field demonstrations of species developed for cultivation will motivate the farmers to adopt cultivation of medicinal and aromatic plants. Some of the improved production technologies developed at research stations have not been transferred to the field to the required extent due to lack of

21 21 sufficient extension personnel and infrastructure. More efforts need to be invested in this direction. Farmers would switch over to cultivation of these plants, besides other factors, if returns from these crops are substantially better than the alternative crops being cultivated by the farmers. While relative crop profitability depends upon several factors an important consideration in developing suitable crop varieties and package of practices for such crops should be to ensure minimization of the cost of cultivation and maximization of the crop yields. Currently, the cost of planting material is the major cost in cultivation of these crops. Efforts need to be made to cut down on the cost of planting material so that relative crop economics can be improved. Given the growing demand for organic products, more so for medicinal and aromatic plants, efforts should be directed towards development of such species which are suitable for cultivation under organic farming conditions. One of the factors weighing buyer s preference for wild species over cultivated ones is the perceived superiority of medicinal constituents of a wild plant as compared to that of a cultivated plant. This in large part is due to the fact that this information on these aspects is not readily available to the buyers. Lack of adequate number of analytical laboratories capable of handling detailed analysis are not easily available. There is a need for setting up a network of regional analytical labs to facilitate the analysis of the constituents of the medicinal plants so that quality certification could be done. This will help build buyer s confidence and encourage farmers to go in for cultivation of medicinal and aromatic plants. Some of the labs could be authorized to issue certification as a means of building buyer confidence as also for product standardization. If appropriate cultivation practices are developed and the crop economics is favorable, efforts can also be made to popularize cultivation of medicinal & aromatic plants in green houses as well as inter-crops. Even simple interventions, such as, better method of harvesting, storage, grading and local level value addition can substantially improve returns to local people. Lack of knowledge on these issues has been an important

22 22 constraining factor in realizing these benefits. There is a need for capacity building of farmers and extension workers so that returns from cultivation can be improved. The State has a good network of State and Central institutions and research centres undertaking research on various aspects of cultivation of medicinal and aromatic plants. However there does not appear to be much coordination amongst different institutions as a result of which there are some overlaps and duplication of efforts on the part of these agencies. Apart from better coordination amongst these agencies there is a need for an added interaction and coordination between these research institutions and marketing and processing agencies so that a proper market feed back could be obtained and research efforts could be prioritized accordingly. 5.2 Need for Strengthening Database & Market Intelligence Any systematic and realistic planning for cultivation and marketing of medicinal and aromatic plants and promoting their sustainable development requires sincere efforts aimed at developing an authentic statistical data base not only in respect of cultivated species of these crops but also of those being currently collected from the wild. Unfortunately an authentic data base in respect of medicinal and aromatic plants is not available in Uttaranchal. The current agricultural statistics collection in the State is confined only to the major field crops and few horticulture crops. Similar database pertaining to area and production of medicinal and aromatic plants need to be developed. In addition, there is also a need for creating a data base on such variables as species wise demand, supply, end uses etc. As of now there appears to be little or no direct contacts between collectors / cultivators and processors/ final consumers. This is in large part attributed to lack of knowledge and awareness about markets with no institutional arrangement available to bridge this information gap. Generally traders or their representatives, visiting local areas are the only source of market information available to these people. Lack of availability and access of market information is thus an important factor constraining improvement of returns to producers of medicinal and aromatic plants. Apart from thus creating the data base on extent of cultivation of these

23 23 plants, there is a need to set up a market intelligence unit to regularly collect, analyze and widely disseminate latest and reliable information relating to markets, marketing channels, prices, trade including imports and exports and make this information available to all concerned in a timely fashion. 5.3 Inadequate Processing Facilities The processing of medicinal and aromatic plants is generally done in either one or two stages. The first stage is semi-processing while the second stage is conversion in to formulations. While conversion in to formulations requires appropriate infrastructure facilities and technical know how and may be beyond the reach of an ordinary farmer, however semi-processing involving such functions as cleaning and grading and undertaking such activities as drying, powdering, making concentrates, boiling and distilling, etc. can be done at the local level. Some farmers are already doing some semi-processing of the medicinal plants for their self consumption. Marketing of semi-processed product rather than raw crop can lead to value addition and improve the profitability of the cultivator. Efforts thus need to be made to encourage semi processing of these crops by encouraging setting up of diversified small scale enterprises/ cottage industries in remote and far-flung areas either through formation of cooperatives or through encouragement of small private entrepreneurs. This will also help in reducing the transportation and packing costs of raw materials and also provide additional employment to local people Uttaranchal has about 15 reputed pharmacies preparing formulations, however these are not sufficient. Efforts need to be made to encourage entrepreneurs set up more processing facilities for preparation of formulations. 5.4 Marketing Marketing of medicinal herbs in general and those of cultivated species in particular is erratic in Uttaranchal. Institutional efforts are confined up to cultivation and propagation but are almost totally absent for development of marketing. The trade is currently non transparent, inefficient, imperfect, informal and opportunistic and often carried out in a hush-hush manner. As a result the farmers are able to realize only a very small fraction of the price paid by the ultimate consumer of final product resulting in lower crop profitability and not providing enough incentive to

24 24 the farmers to go in for its cultivation. Policy intervention aimed at promoting cultivation of medicinal and aromatic plants has thus to consider marketing as a major component. The important constraints for marketing of medicinal and aromatic plants in Uttaranchal arise as a consequence of several factors : the hilly terrain with sparse habitation thinly spread, inadequate infrastructure development (principally road and transport) in relation to these characteristics, generally small size of farm holding of which farmers have currently devoted only a small portion for cultivation of these plants, and low levels of production that too realized over three to four cuttings in a year. In the absence of any institutional support for marketing (CAP does provide some limited support for aromatic plants but that too in its catchments area only and this support is not likely to continue for ever), coupled with lack of any market intelligence and the fact that production of individual farmer in each cutting is very small, the farmer has no option but to fall in the trap of agents of dealers and sell his crop at whatever price is being offered to him. The only price mechanism he has at his disposal to guide him is the previous years sales price. These un-organized market channels have lead to monopoly of few individuals and industries controlling and dictating the market and depriving the farmers of a more remunerative price for his produce. To promote large scale cultivation of these crops the state would have to intervene either through formation of farmers marketing cooperatives or promoting contract farming under a legally binding enforceable contracts and monitored by a regulatory authority. In addition, to meet the domestic as well as international quality standards, post harvest marketing operations e.g., harvesting, grading and standardization, system of certification, packing and transportation need to be improved. For international regulations it may also be necessary to have ISO systems of certification.

25 25 SECTION 1 INTRODUCTION 1.1 What are Aromatic and Medicinal Plants? Medicinal Plants: The plants used for medicinal purposes throughout the world are clubbed under the category of Medicinal Plants. According to World Health Organization (WHO), a medicinal plant is any plant which, in one or more of its organs, contains substances that can be used for therapeutic purposes, or which are precursors for chemo-pharmaceutical semi-synthesis. The WHO estimates that 80 percent of the developing countries population depends on traditional medicine for their health needs. In addition, modern pharmacopoeia also still contains at least 25% drugs derived from plants and many other, which are synthetic analogues built on prototype compounds, are isolated from plants. Transition from synthetic drugs and microbially produced antibiotics to plant based drugs is rapidly gaining acceptance. In many developed countries, traditional herbal remedies are making a comeback as alternatives to conventional medicine. In the United States, the number of people using herbal medicines has increased from 2.5 percent in 1990 to 37 percent in With the sharp rise in popularity of traditional medicines, the economic importance of these plants has increased enormously. With increasing population and increased awareness the demand for traditional medicines and thereby that of medicinal plants is likely to continue to grow in the future at a much faster rate. Aromatic Plants are essential oil yielding plants. They have volatile, adoriferous oils in special cells, glands or ducts located in different parts of a plant, such as, the leaves, barks, roots, flowers and fruits and sometimes in just one or two parts. The oils are usually present in very small amounts and comprise only a tiny fraction of the entire plant material. The oils are produced during some metabolic processes of the plant and are secreted or excreted as adoriferous by-products. The fragrant oils may not necessarily be present as such in the living plants but may occur as odorless compounds termed as glycosides. When the plant tissues are macerated, an

26 26 enzyme reaction occurs which causes the glycosides to undergo a chemical change. This action in turn liberates the distinctive essential oil. Currently most of the medicinal plants grow wild and are collected from forests. Hundreds, and possibly thousands, of plant species are being harvested by millions of poor rural population 6 and used by millions around the world for treating a variety of illnesses. As a result, documenting their population levels or ascertaining the impact of their uncontrolled extraction for use and trade on sustainability has proven to be difficult. However, in the absence of any significant efforts having been made so far at their conservation, serious concerns have often been raised about the increasing threat of depletion and the potential endanger to the survival of plant species in the wild as a result of their uncontrolled extraction 7. With their large populations and ancient heritage of traditional herbal-based medicines, China and India are two great producers of medicinal plants having more than 40% of global biodiversity. Some of the other major producers of herbal medicine include the United States, Germany, Bulgaria, Poland, Japan, Madagascar, and Sudan. The United States is also a major market for herbal medicines, importing hundreds of thousands of tons of herbs each year to support its $3 billion market. Other major consumers include Germany, France, Italy, Spain, and the United Kingdom. Europe as a whole imports one-quarter of the world's trade in herbal medicines, around 440,000 metric tons. An estimate of EXIM Bank puts the international market trade of medicinal plants related trade at over US$60 billion per year, which is growing at the rate of 7%. In the prevailing scenario of continuing increase in the demand for herbal medicines around the world and with little control over their collection or trade regulation 8, the 6 Being an important source of income for the poor communities around the world, collecting medicinal plants for sale continues to thrive irrespective of the consequence of such an action on the possible threat to the existence of these plants. 7 TRAFFIC has studied the use of medicinal plants in Europe, the United States, Africa, and Ecuador, concluding in each case that a number of plant species are threatened as a result of uncontrolled collection. 8 There is very little regulation or monitoring of legal trade in countless medicinal plants, as such illegal trade is not generally a significant problem. In cases where medicinal plant species are protected from trade, smuggling occurs if the plants are rare and valuable enough to risk the consequences. For example, wild Asian ginseng, which grows only in two provinces of far-eastern

27 27 only way to protect wild populations of medicinal plants and minimize threats to sustainability is to increase the supply of equally effective cultivated specimens. Despite some efforts made at promoting cultivation of these plants, their adoption for cultivation by farmers have, for a variety of reasons, so far been slow to come by. Herbal plant cultivation is underway in Europe, but it is still in the experimental phase in the United States, and has barely been attempted in Africa and Latin America. India has been considered as a treasure house of valuable medicinal and aromatic plant species. The Ministry of Environment and Forests, Government. of India have identified and documented over 9,500 plant species considering their importance in the pharmaceutical industry. In India also, threatened by over exploitation of wild populations, some attempts have just begun to encourage farmers to cultivate medicinal plants. In the present context of 'back to nature' in health care, it is relevant that these valuable plant species are not only conserved but also promoted for commercial cultivation in order to meet the increasing demand within the domestic and export markets. It is expected that increasing the amount of cultivated herbs available will decrease the pressure on wild plant populations and help in their conservation. Shift from collection to cultivation of medicinal and aromatic plants will also ensure purity, authenticity and sustainable supply of raw materials required for herbal drugs, including polyherbals. Agro-techniques have been developed for a large number of medicinal and aromatic plants by the ICAR Institute and several State Agricultural Universities under the All India Co-ordinated Research Project on Medicinal and Aromatic Plants. However, due to unorganized marketing arrangements this sector has not exploited its full potential. A Medicinal Plants Board has also been constituted in the Department of Indian Systems of Medicines & Homeopathy to address all the issues. Russia and one province of China, is protected from trade in these two countries. But the finest specimens of wild Asian ginseng sell for tens of thousands of dollars per kilogram. These high prices create a tremendous incentive for poachers, and as many as 600 kilograms of wild ginseng are smuggled out of Russia every year. In the United States, trade in wild American ginseng has been regulated for decades, but poaching inside national parks still occurs.